KeynesCoin

Intro

Bitcoin is very important milestone in the world of digital payments. However its current form includes several shortcomings, as admitted even by the author Satoshi Nakamoto (“Boy it’s screwed up!” – Satoshi Nakamoto)

In this paper we will describe some of the shortcomings and suggest solution. Our suggestions will be based on proven approaches from current financial system that through years of its existence demonstrated its viability and ability to increase the speed of circulation of money in the economy. Also we will bring some daring and revolutionary concepts.

Corrections that we suggest can be implemented in the new payment system. We call it KeynesCoin, as a tribute to well-respected economist, hipster and trendsetter of modern macroeconomic theory, John Maynard Keynes. Official abbreviation for this currency is KNC.

Note: Message found in the Genesis block is cryptic and was not decoded yet: "2014-03-30 Nobody 50.06, Kiska 29.66, Fico 20.28; Founder: heXKRhnGdSg". Person who explains the meaning will be entitled to special KeynesCoin Collector’s Edition issued on first KeynesCoin anniversary.

Problems of bitcoin

Deflation – Deflation is non-intuitive. People are used to inflation (price increase) and its benefits and guarantees. Creation of KNC will be doubled every four years!

Slow economy – Inflation and government projects are the engine of the economy. Bitcoin lacks this engine.

Lack of money – In bitcoin world, everyone is sad that they don’t have enough bitcoins. KeynesCoin solves this problem through inflationary expansion. There will be enough KNCs for everyone, so everyone can be happy.

Limited amount of bitcoins – Limiting number of coins in circulation ruins all our beliefs of our current financial world and is destined to cause failure of such currency.

Further this paper is organized into 3 different areas

Regulation

Social Security System

Taxation

1. Regulation

Regulatory bodies

KeynesCoin system will be under strict oversight of KeynesCoin Regulation Bureau (KNCRB). State Institute for Regulation of KeynesCoin Regulation Bureau will oversee KNCRB.

Bureau of Regulation of Bureau of Regulation of Regulation Bureaus will act as “Supreme Court of Regulation” in case of any doubts or disputes.

Based on teachings of John Meynard Keynes, KeynesCoin embraces two factors as engines of the economy – inflation and government spending.

Despite of the general awesomeness of inflation, there is one known negative effect known as “too many zeroes”. Anyway KNC already foresees this small annoyance and solves it by applying historically proven method – anytime price of goods will have too many zeroes (defined by central authority), system will discard appropriate number of zeroes.

To allow government spending even before any KNC will be mined and any goods will be produced, KNC introduces institute of pre mined KeynesCoins. These pre mined KeynesCoins will have special status and will be used for government projects, espionage, nuclear weapons, to fight the internal enemy, terrorism, pornography and other evils according to prevailing religion.

KeynesCoin Address System

KeynesCoin address will include first name, surname, birth date, passport number, religion, race and sexual preference. In addition to local regulator, addresses are registered in International Central Register of Crypto Addresses.

Creating and securing private keys

Private keys are issued by No-Notional Bureau of Security. As a source of randomness NNBS will use established and verified method “return 4; // chosen by fair dice roll, guaranteed to be random", as was described by top security expert Randall Munroe in standard XKCD-221.

Citizen can obtain his private keys after he/she provides authorities with Application with at least 3 different drawings on theme “Why I love NNBS”, notarized copies of birth certificate, International Certificate of Vaccination or Prophylaxis approved by World Health Organization, and a Solemn Declaration of Good Repute and Moral Purity signed by State Hygiene Bureau or local priest.

All the private keys will be stored in No-Notional Bureau of Security, encrypted by couple of levels of ROT-13 cypher. Levels of ROT-13 will be computed as 2^( classification level), where classification level is integer from 1 to infinity.

Private keys backup is absolutely secure thanks the strongest password in the history that gains its immense strength by using letters NNBS and 123.

Legal Tender

One KeynesCoin has value of 1 hour of work. Every citizen is obliged to provide 1 hour of his/her work to anyone, who is willing to pay one KeynesCoin for that work.

The exception from this obligation are workers who are members of following labor and trade unions: nurses, teachers, agriculture workers, priests, painters (except of painters who use colors containing acetone), lobbyists and golf players, and producers of wheelchair back wheels (only if they are made of organic rubber).

Official miner device homologation

Mining is allowed only by homologized devices approved by Central Research Institute of Cryptocurrency Mining and Water Flow Regulation, under oversight of Bureau for Control of Research of Cryptocurrency Mining and Water Flow Regulation.

Homologized miners have to filter all the nuclear energy. In case when miner is using solar energy, miner will receive additional KNC for each mined block.

Exchanges

Main exchange is called Mt. FED and it is a state institution and is subject to regulations of Central Bank and subject to strict control of NBRRS (National Bureau for Regulation of Racketeering and Speculation).

International transactions

All international transactions will be thanks to International Bureau for Control, Management and Monitoring of Cryptocurrency Adresses automatically identifiable and can be subject to duty defined by Customs Administration. This will keep local producers and service providers safe from evils of international competition, like the annoying necessity to increase productivity from time to time or to offer better products and services.

To guard the ethics and international correctness of transactions UNO (United Notions Organization) will overview the whole international trade involving KeynesCoin. UNO has special right to invalidate any transaction in case of suspicion of terrorism (most of the transactions above 100 KNC to addresses in Iran). KNC earned by such invalidation will be used to restore World peace and build spying stations to ensure moral purity of the whole world.

Fractional reserves (double spending) and creditor protection

Because fractional reserve banking system is well established and proven, KeynesCoin will follow this efficient model. Addresses defined as banks will be allowed to “spend” (provide loans, invest and otherwise virtually create without real backing) 95 KNC for every KNC they receive. If that KNC is from the “pre mined” pool or created directly by government or any other official authority, bank can “spend” up to 98 KNC .

In case creditors will try to withdraw their funds from such bank, and bank will not be able to return these funds, standard XKCD-221 will be used to roll the dice and in case the result is even number, these funds will be automatically collected from additional tax. This additional tax will be imposed again only on individuals and companies within range of 20% around income/revenue median. This additional tax will also include special award for Bank’s management for their heroic efforts to support the economic growth by increasing the money quantity in circulation. In case of odd result standard XKCD-221 will be used again.

Honorary “Vera Pohlova Legacy Representative” position

As a measure of last resort so save the world necessary, honorary post of “Vera Pohlova Legacy Representative” will be granted to the oldest person living in given state.

This important role is named in tribute to Vera Pohlova, the pensioner from Czech Republic, author of the legendary sentence describing the solution to any possible problem of the world “I would ban all the internets and computers!” (1997)

The VPLR will be the main KeynesCoin moral authority and will have the special key, that is able to ban all the KeynesCoins (The Red Button).

2. Social Security System

Pension system

After mining given amount of KNC every miner is entitled to receive pension benefits that will be collected from other active miners and fairly distributed to retirees. Miners also have the opportunity to send portion of their mined KNC to account (address) of First State Pyramid Institute or MineCare.

Health insurance

Special committee will decide based on sophisticated analysis who is not healthy enough to mine. This committee will directly report to Parliamentary Committee of KeynesCoin Regulation that is directly elected by sponsors of political parties, who are directly elected by founders of political parties (or their successors) who are directly elected by citizens, who like to vote directly.

Social guarantees and gratefulness

Because the KeynesCoin system ensures providing support to those in need, it is taken for granted that everyone’s need is taken care of. In case anyone who is receiving social security benefits will be so ungrateful that he or she will try to earn additional money by providing something useful to the others, such person will be punished not only by disqualification from social security benefit scheme, but also additional taxation of any income. If the villain is woman on maternity leave, her child will be punished the same way. For this rule, selling homeopathy, feng shuei consulting and anything related to religion is not considered as “something useful”.

Money collected from above mentioned additional taxes will be used for campaign discouraging people from this kind of ungrateful behavior.

Creditor protection in case of non-bank subjects bankruptcy

KeynesCoin not only solved issue with banks going bankrupt, but also automatically compensates victims of bankruptcy of non-bank subjects like Bitcoinica and MtGox. Their customers will automatically receive 172.4% of the original value, because state should not only compensate their financial loss, but also the psychological trauma and increased stress level hormones. This will solve two huge problems of today’s world – it will enhance health of citizens and at the same time it will kick start the economic growth. On top of the compensation, victims will also receive interest calculated based on the Central Bank discount rate.

3. Taxation

Automated Progressive Tax System

KeynesCoin allows tax to be applied automatically on each transaction logged into the blockchain, which ensures 100% tax collection. This means not only saving enormous amounts of money spent currently on tax collection from tax evaders. It also means cost saving on healthcare – by and saving health of plethora of Tax Authority employees who now will be able to peacefully play solitaire in their cubicles, as well as tax evaders’ health who will not have to meet any Tax Authority employees and thus have better day in general.

Additional revenue can still be obtained from fining the incorrectly filed tax declarations.

Anyway to keep some of the helpful practices of current systems that allow faster economic growth, automatic Tax Relief is also built into KeynesCoin. It is known that “strategic investors” bring economic growth and are in general entitled not only to subsidies, but also to zero tax rate for next 25 years. Therefore KNC will automatically calculate 0% tax for 100 of the largest receivers of government subsidies, as well as companies and individuals listed in Central Register Of Notable Yachters. CRONY will be maintained by Tax Authority and Mt.FED and will include companies and individuals classified as Friends of State, Friends of People, Friends of Political Leaders etc.

To cover the tax revenue shortfall, KNC will automatically raise tax for companies and individuals with income/revenue from range of 20% around income/revenue median.

Tax Declaration and Tax Authority

Every citizen is obliged to file annual tax declaration. Tax Authority checks if tax declaration is filed correctly. Reconciliation is based on blockchain that serves as authoritative source of information because taxes are calculated and paid automatically anyway. Tax declaration serves only as a tool to keep employment on a reasonable level as it will allow Tax Authority to keep its existing personnel.

Tax declaration needs to be delivered to Tax Authority in defined timeline and format otherwise tax payer will be heavily fined.

Form can only be filled in according to template tax.602 that is available online on Tax Authority’s website (accessible only through IE 6 or below). It can only be printed on dot matrix printer and signed and notarized. For company tax declaration proper ink stamp is required. Personal income tax declaration requires additional signatures for form to be considered complete. If the taxpayer is under 37 years old, it has to be signed and notarized by his legal representatives, who at the same time bear criminal liability for any potential errors in tax declaration. If the taxpayer is 37 and older, declaration has to be signed and notarized by state-certified general physician, psychiatric and state certified school counselor of the latest taxpayer’s school.

Conclusion

We believe we addressed all the issues related to existing cryptocurrencies.

We think that KeynesCoin concept is a big step forward towards happy government and happy nation. By strongly encouraging aggregate demand through inflation and money circulation it should be possible to ensure immense economic growth on all the planets of Milky Way for at least next 300000 years. Also thanks to the fact that its Authorities are democratically elected it is ensured that it will always fully respect the will of the people and will never go against them.